Re: Retirement

As I stated above I have been thinking about getting out for a while. Just couldn't make myself do it. We have been talking about retirement for more than four years since the old plant where I worked closed. Mrs. RSKY retired last June from her teaching job. I always expected my retirement to be closer to 59 1/2 when the 401K became available.

Anybody ever hear of IRS 72-T ??

You can use that rule to draw out your 401K early with no penalty. But it is somewhat complicated. More on that later.

The biggest of out three 401Ks is with Fidelity. They have an excellent planning page on their website, www.401k.com. Don't know if you can get into it if not a customer but I would try if I was thinking of retirement.

The first thing we had to do was learn how much we spent each month before we planned anything else. We have a 'one checkbook' rule for paying the bills. One checkbook is placed in a certain spot and all 'payments' are made from it. No groceries, clothing, or extras, just bills. My wife made out a template and put all our monthly and regular expenses for 2010 on it. Electric, gas, water, internet, satelite tv, house phone, cell phone, insurance for home and vehicles, church contribution, health insurance, trash pickup, newspaper, safe deposit box, payment for her vehicle, and (drum roll) allowance for a tractor payment. I put all these on a spread sheet with lines at the bottom for average, monthly high, and monthly low.

I took the highest month for the year for each item and added them together. For example our gas bill was $200 in March, but only $6 in June. So gas gets budgeted $200 a month. Others stay the same all year round, Internet, house phone, etc.. I took this total and added $1000 to it for food and clothing. This is our monthly 'essential expenses'.

I entered this number in the expenses slot on the planner. It then asked for monthly 'discretionary' spending. I put in an amount that I thought would allow us to eat out regularly, buy stuff for grandkids, travel, and buy new tractor implements.

The planner asks a lot of questions about your investments, work in retirement, etc.. It also adjusts for inflation. In the planner I placed all my funds on the very conservative, safe, lower paying investments.

Anyway, according to Fidelity we will run out of money at age 93. Told my daughters that each would have to take one of us to live with them.

Re: Retirement

As Dave mentioned, I think medical expenses and keeping insurance are the big issues before you turn 65. If you can afford the insurance or have a plan for coverage, you'll be fine. I am retired military. Having Tricare is a blessing. Without it, I'm not sure I could have retired as I did before turning 61. My wife and I have enough income that I only tap our considerable savings for occasional luxuries. We both had some real estate we sold and paid off debt. That also helped a bunch to reduce unneeded expenses.

On the other hand, my brother and his wife have their home paid for, but they only have social security and Medicare to live on. They struggle constantly just to survive.

Re: Retirement

Congratuations... on planning for the future and finding the right spouse!

A friend was in a very high stress job for years as a production manager for a Glass Manufacturer... he was getting ulcers and his health was suffering so he left after 33 years with his pension.

They moved to Florida to be near family and his health really started to go down...

There was a local supermarket that always had hiring signs in the window... one day he asked the manager why and the response was most new hires are young and eventually stopped showing up for work...

My friend said he wanted to apply and the manager was caught off guard... he then hired my friend as a courtesy clerk... he absolutely didn't need the money.

He had a great time, loved coming to work seeing "His" customers and really liked working with the teenagers and 20 somethings... he believes finding that job saved his life and his wife said he was a new man being able to be respected by the young generation. He had made so many new friends... some customers would only come when they knew he was on duty.

Re: Retirement

The 2/3 salary rule is hooey. We live on 1/8 what I last earned.No reduction in standard of living. I guess this benchmark is for a lower ending income.

-Mike-

I would agree depending on standard and salary...

I also see the opposite... people that retire and spend a fortune on travel or medical related expenses... as in taking out a home equity line of credit to fiance a few years of lavish travel and then loosing their home when the bill comes due... it does go both ways.

Re: Retirement

Keep in touch and let us, or me, know how this works out. I've thought about it for the past few years and wonder if anyone would hire me now, even with my past and present certifications. I'de love to have a $10.00 hr. job if the ins. was there. I have the retirement money, but ins. coverage has become the problem. Want to hear more.

Re: Retirement

I'd go for it. I retired in 08, my decision was encouraged by a buyout & the fact that the plant was closing. My wife is 7 years younger and still working, so that helps, but everything looks great here. My blood pressure, sugar levels and general aches and pains have all improved. I feel 10 years younger. Might as well get a few years in the sun, you never know what the future will bring.

Re: Retirement

I retired at age 54, four years ago. You are on the right track in going over your past expenses to get an accurate estimate of ongoing expenses. Trying to use a fraction of your current earnings to estimate retirement expenses is not practical. For instance, I was saving 40% of my salary before I retired. Now that expense is gone and my house will be paid off in 3 years, so that expense will also be gone.

As others have said, having affordable health care insurance is key. As far as working is concerned, it is really up to you. I have never worked again after I retired and don't miss it, but if I did, I can afford to take any job I want, even a clerk at a hardware store or an all volunteer gig like Habitat for Humanity. The good part is you get to do what you want without worrying about losing your job and your family's security. Once you lower your stress, your health will improve in ways that you didn't even realize was a problem.

Re: Retirement

Medical is a big issue with me at sixty and my wife who is sixty four. We too lost good jobs and eventually our medical. At least our pensions are still intact for now. My wife draws SS and tends to the horses and my elderly mother who lives with us. I would pull the plug at sixty two if I can have medical one way or another.

I figure on finding something part time to fill in the difference between 62 and 65 SS wise. Though I still have places that I would like to see, travel seems like such a hassle, I would just as soon stay home. Besides, I have horses that will outlive me so I have plenty to do.

There is one trap that you do not want to fall for. I have seen retirees get hired and then get sucked into working far more than they originally wanted too. Seems this week only can turn into many weeks. Perhaps the thought of some extra money is enticing?

Re: Retirement

I believe you can live comfortably on 1/2 your working income, Provided:
House paid for, no debt, good health, and something to do with your time. I 'farm', help the neighbors, buy and sell on Craigslist and eBay, play hockey 3 - 4 time per week in an over 60 league, don't smoke, and am de-cluttering the house, shed and barns. I bought a golf cart and drive it around the property when weather permits to the great enjoyment of my dogs. If I needed extra money to live on, I can rent stalls to horse owners/boarders. I have an approve home equity loan on the property if I wanted to buy a new car, tractor or vacation. Mom still works as a House Keeper (and keeps up the house) and that's what else we can live on. Food, taxes, insurance and fuel are our only costs. Make sure your kids understand that you as a bank is done for the endurance.

There is no "I" in team, but there is a "Me" if you want to jumble it up a bit...